Hi all, just thought I'd introduce myself.
My name is Steve, I live in Northgate in Adelaide. I read Jan Somers book "More Wealth from Residential Property" about 1yr ago, and can honestly say it's the best book I have ever read. I had already been interested in property and read some other books as well as magazines, but can honestly say it's the best advice available, especially for total beginners.
Since reading it I have also bought a copy for my 2 of my friends who have their own home but are scared of making the first move, and my brother and sister in law who are finally deciding to look into an investment property but have'nt bought yet. So I figured better for them to read the book before they make a mistake.
I bought my first property back in 2002 in Northgate SA. At the time this house was just over 1yr old. I rented this out for a year before moving in myself. I then leveraged off the equity in this property to buy my second house in Davoren Park SA.
The house in Davoren Park was also just 1yr old, built in a small new subdivision and cost $198,000. This house had 3br, 1bth, and double garage under main roof. This one I rented out for $200pw initially, and last year raised it to $210pw (despite probably being able to get $215-$220pw). I have very good tenants in this property who keep the place well maintained. After 6 months I added a veranda at the back which the tennants also appreciated.
Then, in August 2006 I again leveraged off the capital appreciation in my first 2 properties to puchase a 3rd property in Smithfield Plains, Adelaide. At the time of purchase the house was brand new and not yet lived in. I paid $193,000 for this property which had 3br, 1bth, double enclosed carport under main roof. This house I have rented out for $220pw. I have done nothing to this house, although I may add a veranda to this one as well.
With my 1st two investment properties being both virtually brand new, last month I decided to take the plunge and buy an older house for future development potential.
I have just signed the contract on a 3br, 1bth, 1 carport, stand alone house in Elizabeth North, just across from the new developments at Davoren Park and Smithfield etc. It is currently being rented out for $165pw which I will increase to at least $175pw when I take control. The price I have paid is $139,000 which I am aware is at the higher end of the market at the moment, however I have reasoned it is still fair as other houses in the area have sold in recent months for $125-$130k, even as high as $140k in one instance - and these houses are duplexes (ie. attached). As I said, my house is stand alone, and is on a 800+m2 block. I am also buying it puerly for the land value, which I again reason is fair value - nearby Davoren Park, and Andrews Farm etc. blocks are selling for $80k+ for 400m2 which works out to only $70k per block I'm paying (plus subdivision costs at some point in the future). My reasoning is that this is really the only way I can buy land at the moment, as land by itself is not tax deductible.
Buying one half of a duplex for $10-$20k less didn't really appeal to me, as I'm not comfortable with the idea of being at the mercy of the party who owns the other half of the building (eg. a 70yr old who has vowed to live there until he dies etc.). This is a little out of my comfort zone as I have no experience with older houses, and I realise it will be attracting a lower socio economic tennant, so therefore higher risk of rent default etc.
People familiar with the Adelaide market will realise that with the exception of my first house in Northgate (which is 8km North East of the city centre), I have been buying on the Northern outskirts of the city, which is a lower socio-economic area. Most of the houses are still old housing trust, duplexes etc. But new subdivisions are popping up everywhere (Davoren Park, Smithfield, Smithfield Plains, Munno Parra, Andrews Farm), and old houses are being knocked down.
I have found the best thing I could have done for myself in my property career so far is finding a property manager. I cannot stress enough how fantastic my property manager up north is!
Unfortuantely I believe I have already made one mistake by possibly paying too much for the Davoren Park property. I feel I may have been able to get it for at least $3k cheaper.
I am also aware that I may be focussing too much on Adelaide, however I believe the Northern suburbs have HUGE potential, with the land shortage, new jobs being created throughout industry, state and federal infrastructure projects such as the Northern Expressway which will make the northern suburbs more easily accessible from the city and cutting down travelling time.
Hope I didn't bore you all too much!
Steve
My name is Steve, I live in Northgate in Adelaide. I read Jan Somers book "More Wealth from Residential Property" about 1yr ago, and can honestly say it's the best book I have ever read. I had already been interested in property and read some other books as well as magazines, but can honestly say it's the best advice available, especially for total beginners.
Since reading it I have also bought a copy for my 2 of my friends who have their own home but are scared of making the first move, and my brother and sister in law who are finally deciding to look into an investment property but have'nt bought yet. So I figured better for them to read the book before they make a mistake.
I bought my first property back in 2002 in Northgate SA. At the time this house was just over 1yr old. I rented this out for a year before moving in myself. I then leveraged off the equity in this property to buy my second house in Davoren Park SA.
The house in Davoren Park was also just 1yr old, built in a small new subdivision and cost $198,000. This house had 3br, 1bth, and double garage under main roof. This one I rented out for $200pw initially, and last year raised it to $210pw (despite probably being able to get $215-$220pw). I have very good tenants in this property who keep the place well maintained. After 6 months I added a veranda at the back which the tennants also appreciated.
Then, in August 2006 I again leveraged off the capital appreciation in my first 2 properties to puchase a 3rd property in Smithfield Plains, Adelaide. At the time of purchase the house was brand new and not yet lived in. I paid $193,000 for this property which had 3br, 1bth, double enclosed carport under main roof. This house I have rented out for $220pw. I have done nothing to this house, although I may add a veranda to this one as well.
With my 1st two investment properties being both virtually brand new, last month I decided to take the plunge and buy an older house for future development potential.
I have just signed the contract on a 3br, 1bth, 1 carport, stand alone house in Elizabeth North, just across from the new developments at Davoren Park and Smithfield etc. It is currently being rented out for $165pw which I will increase to at least $175pw when I take control. The price I have paid is $139,000 which I am aware is at the higher end of the market at the moment, however I have reasoned it is still fair as other houses in the area have sold in recent months for $125-$130k, even as high as $140k in one instance - and these houses are duplexes (ie. attached). As I said, my house is stand alone, and is on a 800+m2 block. I am also buying it puerly for the land value, which I again reason is fair value - nearby Davoren Park, and Andrews Farm etc. blocks are selling for $80k+ for 400m2 which works out to only $70k per block I'm paying (plus subdivision costs at some point in the future). My reasoning is that this is really the only way I can buy land at the moment, as land by itself is not tax deductible.
Buying one half of a duplex for $10-$20k less didn't really appeal to me, as I'm not comfortable with the idea of being at the mercy of the party who owns the other half of the building (eg. a 70yr old who has vowed to live there until he dies etc.). This is a little out of my comfort zone as I have no experience with older houses, and I realise it will be attracting a lower socio economic tennant, so therefore higher risk of rent default etc.
People familiar with the Adelaide market will realise that with the exception of my first house in Northgate (which is 8km North East of the city centre), I have been buying on the Northern outskirts of the city, which is a lower socio-economic area. Most of the houses are still old housing trust, duplexes etc. But new subdivisions are popping up everywhere (Davoren Park, Smithfield, Smithfield Plains, Munno Parra, Andrews Farm), and old houses are being knocked down.
I have found the best thing I could have done for myself in my property career so far is finding a property manager. I cannot stress enough how fantastic my property manager up north is!
Unfortuantely I believe I have already made one mistake by possibly paying too much for the Davoren Park property. I feel I may have been able to get it for at least $3k cheaper.
I am also aware that I may be focussing too much on Adelaide, however I believe the Northern suburbs have HUGE potential, with the land shortage, new jobs being created throughout industry, state and federal infrastructure projects such as the Northern Expressway which will make the northern suburbs more easily accessible from the city and cutting down travelling time.
Hope I didn't bore you all too much!
Steve
